Maintain long positions as the index is still well positioned near the resistance zone. The FKLI ended the latest session near flat as it inched up marginally by 0.5 pts to close at 1,677.5 pts. Trading took place in the range of 1,671 pts and 1,678 pts. The index has been showing signs of developing a minor sideways consolidation in recent sessions. This consolidation phase is taking place near the resistance zone that made up of the downtrend line (as drawn in the chart) and 1,700-pt mark. Overall, the counter-trend rebound that started from the low of the 14 May’s “Piercing Line” formation is still not showing any sign of reaching an end. Hence, we keep to our positive trading bias.

In the absence of price rejection signals from the said resistance zone, we continue to recommend traders to stay in long positions – initiated at 1,619.5 pts. A stop-loss can now be placed at below 1,651 pts, the high of 18 Jun.

Towards the downside, the immediate support is set at 1,633.5 pts, which was the low of 17 Jun. This is to be followed by 1,613 pts, the high of 13 May. Moving up, the immediate resistance is expected at 1,700 pts, being the next round figure. This is followed by 1,730 pts, near the high of 21 Feb.

Source: RHB Securities Research - 26 Jun 2019